Financial and tax reporting

As per ASC 820 (formerly known as FAS 157) guidelines, private equity and venture capital firms are required to value their holdings in unlisted, startups and illiquid assets using a fair value measurement approach which is complex and difficult to apply and involves in-depth understanding of current global market conditions. At Veristrat, we have a seasoned professional team which understands the intricacies involved in performing such complex valuations with greater accuracy and reliability.

In-depth analysis is performed through detailed portfolio valuation study including documents like article of association, term sheets, capital structure, stock purchase agreement and financial statements analysis.

Internal Revenue Code (IRC) 409a

IRC 409A regulates the treatment for federal income tax purposes for non-qualified deferred compensation. Valuation process is based on comprehensive analysis of financial statements, business plans, financial projections, shareholder agreements, product descriptions, management strategic reports. All the options should be granted at exercise price equal to or higher than the fair market value. Employees receiving the deferred compensation benefit may incur an income tax penalty of up to 20% in the event the company issues deferred compensation below fair market value.

We as a team strive to provide robust financial and strategic solutions to our clients through comprehensive in-depth analysis and adhering to quality standards.

ASC 805 (formerly known as FAS 141R) provides guidance for accounting and reporting of business combination. As per guidelines stated, an acquirer will recognize at the acquisition date all assets, liabilities and any non-controlling interest in the target company.

ASC 805 emphasizes that for any activity to be considered as a business, it's mandatory to have inputs and processes elements which together will be used to generate outputs. An intangible asset should be recognized and recorded as an asset separate from goodwill in some scenarios. Most commonly recorded intangibles assets as per ASC 805 includes:

Customer Relationships

Trademarks

Noncompetition Agreement

Technology

Our highly trained professionals work primarily for complex purchase price allocation valuations and help clients to make informed and calculated strategic decisions.

As per ASC 350 (formerly known as FAS 142) guidelines (Goodwill Impairment), companies performs goodwill impairment annual test at each reporting unit level. Goodwill impairment test is performed in 2 levels. At level 1, whether goodwill is impaired is tested by comparing fair value of its reporting unit to its carrying value and at level 2, how much goodwill is impaired is computed if the carrying value is greater than the fair value. Implied fair value of goodwill is calculated by taking the difference of reporting unit fair value and amount as allocated to the assets and liabilities.

We have highly experienced and dedicated team which primarily works with clients on purchase price allocation and goodwill impairment complex valuations. We provide highly detailed oriented strategic expertise in carrying such valuations across diversified industries.

As per ASC 718 (formerly known as FAS 123R) guidelines, it regulates the framework for accounting and reporting of share based arrangements with employees. Company must recognize fair value of stock based compensation as awarded to employees for financial reporting perspective. This Fair Value recognition of a stock grant must be accounted by using a total intrinsic value of a share grant or an option-pricing model approach. Total cost of the stock-based compensation is computed over the vesting period or till employee provides services to the company and incorporates all types of share-based employee compensation, including stock options, restricted stock, employee stock purchase plan and appreciation rights etc.

ASC 815 (formerly known as FAS 133) mandate covers comprehensive and complex guidance on derivative and hedging transactions. It provides such reporting practices as required to report hedge gains and loss on fair value basis. Per guidelines, accounting for three different types of hedges including cash flow hedge, fair value hedge and foreign currency hedge is based on fair value as reported on balance sheet.

Performing valuations for such complex derivative instruments demands high end expertise. Our dedicated valuation team assists clients to compute such complex calculations with comprehensive due diligence and analysis.